FCC Unveils Connect America Fund

The plan will provide dedicated support to extend mobile broadband to large areas of the country that are currently shut out.

Federal Communications
Commission chairman Julius Genachowski outlined a plan to reform and modernize the
Universal Service Fund and Intercarrier Compensation system in a speech
delivered at FCC headquarters. The plan would, if adopted by the Commission later
this month, reform the USF/ICC to unleash a series of benefits, including
expanded broadband infrastructure, for millions of Americans.
The plan is designed to help
deliver more value for wireless consumers, increase private investment, and
spur near-term and long-term job creation. In addition, the plan will provide dedicated support to
extend mobile broadband to large areas of the country that are currently shut
out from the benefits of advanced mobile services.

Despite spending $4.5
billion per year, USF is failing to get broadband to approximately 18 million
Americans in rural areas. The new plan would ensure money is spent in a more
targeted and efficient way, Genachowski said.

"Our plan would deliver
tremendous benefits for consumers. Accelerated broadband build-out and upgrades
to networks mean that millions more consumers of all ages will be able to enjoy
the economic and social benefits of broadband," he stated. "And consumers
overall will be treated more fairly, thanks to the elimination of deep
inequalities ingrained in the current system, cuts in wasteful spending and
constraints on the growth of a fund that is paid for by consumers. We estimate
that wireless consumers will see more than $1 billion in annual benefits from
ICC reform alone."
The first plan's main goals
would be ensuring universal availability of "robust, scalable, affordable
broadband" to homes, businesses and anchor institutions in unserved areas. The
Connect America Fund would begin near-term build-out to hundreds of thousands
of consumers in 2012, and would ultimately help get broadband to the 18 million
Americans who can't get it today.
Ensuring universal
availability of affordable mobile broadband through a new Mobility Fund, which
would be part of the Connect America Fund, is the plan's second major goal.
Deployment of state-of-the-art mobile broadband would be extended to more than
100,000 road miles where Americans live, work and travel. In addition to a
one-time shot-in-the-arm effort to accelerate deployment of 4G networks in
2012, this Fund would provide "significant ongoing support" for rural mobile
broadband.
Genachowski detailed the
critical ways in which the current USF/ICC system is broken and in urgent need
of reform, such as being outdated, wasteful, inefficient and unaccountable,
thus putting increasing burdens on consumers. "Like USF, the current ICC
system is unfair to American consumers. It forces hundreds of millions of
consumers across the country to pay higher bills to subsidize monthly local
telephone bills as low as $8 for other consumers," he said. "By
eliminating billions of dollars in hidden subsidies that are currently built in
to wireless and long-distance bills, consumers can expect reduced costs, better
value for their money or both."
Last year, Genachowski
started pushing for improved mobile broadband, saying that deploying 4G
wireless networks would help allow the United States to catch up with other
industrialized nations that currently offer faster, more complete wireless
broadband coverage. "We need to have enough of an infrastructure here for
companies to innovate here, launch here and want to do business here," he said
at a 2010 D8 technology conference.

Nathan Eddy is Associate Editor, Midmarket, at eWEEK.com. Before joining eWEEK.com, Nate was a writer with ChannelWeb and he served as an editor at FierceMarkets. He is a graduate of the Medill School of Journalism at Northwestern University.